Students are invited to consider doing an independent study with Professor Twomey on:

"Macroeconometric Models of the U.S. Economy"

The focus of the course is statistical models of the U.S. economy; in particular, that of Ray Fair of Yale University. The model, together with its Workbook and all supporting software, is available for free on the Web at http://fairmodel.econ.yale.edu/usmodel/index2.htm. During the semester, students will perform a series of workbook exercises with the model, investigating topics such as the estimated impacts of monetary and fiscal policies, international effects, and some supply side analyses.

In addition, we will compare the equations in Fair's models with those of other published models, such as Brookings, Goldberger, and Hall & Taylor, looking both at the general structure as well as particular aspects such as consumption functions, investment accelerator, and the demand for money.

All of this leads to an attempt at comparing the macroeconomic predictions of the Fairmodel with those of other major models on the market, as available in the Wall St. Journal as well as standard academic sources, with the immediate goal of appreciating the range of the actual predictions, as well as the more fundamental goal task of understanding the relative importance of theory and practicality in generating predictions.

An independent study (Econ 499) is a course taken for credit (three hours, in this case) on a pass/fail basis (which means that it cannot serve as an upper division elective for the Economics major). Because it is an independent study, there are no formal class lectures, but students are expected to meet periodically with the professor to discuss the material and present results. In the case of this course, much of the work will be discussion of the results of the computer runs, and analysis of the underlying economics. Some short papers will be required, as well. Click here for the tentative Syllabus and for some suggestions on How to get started.

The course will be at the level of intermediate macroeconomics (Econ 301) and the regressions part of statistics (Econ 305). Students should probably have completed one of those courses, and be concurrently taking the other (or its equivalent) while enrolled in the independent study. Evidently, the course will involve much time on a computer, although no programming skills are needed beyond being able to read a Web page. That may sound incredible, so students who are potentially interested should check out the Fairmodel site at the address listed above, to see for themselves. Professor Twomey's office is upstairs in the CASL Annex; he can also be reached at 313-593-5176 (o), 313-995-1907 (h), or by clicking mtwomey@umd.umich.edu

Special forms for Enrolling in Independent Study can be obtained in the CASL Advising Office in 1112 U-Mall.